IRS strips Christian Coalition of tax-exempt status

Friday, June 11, 1999

For more than 10 years the funds raised by the Christian Coalition have remained exempt from federal taxes. The group, founded by televangelist Pat Robertson, had claimed it was like many churches and religiously affiliated groups — a nonprofit free from federal taxation.

The Internal Revenue Service, however, has recently ruled that the coalition is not entitled to that status. Its ruling was spurred, in part, by the efforts of Americans United for Separation of Church and State, a Washington, D.C.-based advocacy group. Americans United has filed complaints with the IRS, arguing that the Christian Coalition has continually abused its status by blatantly electioneering for Republicans. Federal tax law allows nonprofits to forgo paying taxes as long as they do not attempt to sway the outcomes of elections.

Frances Hill, a University of Miami law professor, told the St. Petersburg (Fla.) Times that the IRS ruling suggested that the coalition's “real activities were in substantial part to influence the outcome of elections.”

The coalition and the American Center for Law and Justice, a conservative law firm also founded by Robertson, have routinely denied those charges and have defended the coalition's voter guides as educational, nonpartisan documents that compare voting records of candidates.

Last November, when Americans United and other nonprofit groups, such as the Interfaith Alliance, warned churches nationwide to avoid distributing the coalition's voter guides, the ACLJ and Christian Coalition representatives derided the warnings as scare tactics.

Randy Tate, then the executive director of the coalition, sent a letter to religious leaders accusing Americans United of trying to “intimidate and harass Christian pastors.” Jay Sekulow, chief counsel for the ACLJ, announced his group would defend any church sued or threatened over disseminating the coalition's guides. According to Sekulow, “churches and their pastors have the right to address political issues like homosexuality and abortion from a biblical perspective.”

Officials for Americans United, however, sent the Christian Coalition voter guides to the IRS along with urgings that the guides were not educational but partisan, because they focused on specific issues such as gays in the military and abortion.

In a prepared statement, the coalition announced yesterday it had withdrawn its application seeking tax-exempt status with the IRS and would promptly operate as “Christian Coalition International.” The statement said the reorganized coalition would act like “any traditional business corporation” with the freedom “to endorse political candidates on a state and local level (and) make financial contributions to candidates.” Additionally the coalition's statement said it would rename its Texas chapter, which currently has federal tax exempt status, the Christian Coalition of America.

Rob Boston, assistant communications director for Americans United, however, said the coalition's efforts to sway elections had been undermined by the IRS ruling.

“The ruling will significantly hamper the coalition's efforts to distribute its voter guides to churches,” Boston said. “You will have to look far and wide to find a pastor willing to hand out the guides.”

Boston said he could not fathom why it took the IRS so long to figure out the coalition “was a partisan group.”

“The evidence was overwhelming that, despite the coalition's declarations it was merely an educational group, it was actually a political operation,” Boston said. “Now that the IRS has recognized this, I say amen.”

The IRS ruling is the latest in string of recent setbacks for and embarrassing media reports about Robertson's operations.

As several newspapers, such as The Washington Post and the St. Petersburg Times, have reported, the coalition's influence in politics appears to be waning. The Times reported this week that the coalition has chapters in only six states, a drop from its peak of 25. In late May, former Moral Majority spokesman and conservative columnist Cal Thomas, at a Freedom Forum World Center program, criticized the religious right's fund-raising efforts. Thomas said the religious right's actions had stirred voter cynicism and that “the big national ministries” should distance themselves from politics. Also, last week the Bank of Scotland announced it was backing out of a business deal with Robertson to set up telephone banking services in the United States. Officials for the bank said they were disgusted by Robertson's comments, aired on his religious broadcasting network, that Scotland was a “dark land” unduly influenced by gay people.

Despite the criticism and the IRS ruling, Robertson's coalition appears not to be dissuaded from its political ambitions. In yesterday's prepared statement, Robertson said the reorganized coalition was undertaking “its boldest attempt ever to train and recruit pro-family activists who wish to play a role in statewide legislative battles.”